Assignment
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1) What is the difference between both a business strategy and a business model?
A business strategy is a company’s working plan geared towards the achievement of goals, vision, objectives, financial optimization, and successful competition. Examples of a business strategy include sales, marketing, program, information, sustainability, and human resource. A business model, on the other hand, defines a rationale of how a company creates, captures, and delivers value in both social and economic contexts. Examples of a business model include the franchise, subscription, affiliation, and drop-shipping.
While these two business aspects seem similar, it is evident that a business model differs from a business strategy. A business model is a method of systematically generating revenue in situations of profitable companies while a strategy aims at achieving the set objectives. A business model is developed during the establishment of a company while a business strategy is a subject o gradual change hence the need for revising the plan.
2) Discuss and provide examples for the various industries to include: growth industry, mature industry, and declining industry.
A growth industry is one that creates value through the continued expansion of earnings, spending on development and research, and cash flow. An example of this type of industry is the technology sector. Relatively large but few distribution companies are in existence in this industry. Barriers to entry are few and not elevated due to the nature of the industry. Product differentiation is well defined, with products being different. These factors show that there is no stiff competition and that a company at this phase has many opportunities with minimal threats.
A mature industry is one that has passed through the emerging and development phases of a business. This industry is characterized by limitations in modes of achieving future growth, and examples include; petroleum and automotive industries. There are many large companies on this level with numerous middle height barriers which have been successfully tackled. Minimal product differentiation exists. These factors show that minimal competition exists and that both opportunities and threats are media.
A declining industry is one that is continually registering negative growth. A decline in demand for products leads to stagnation or decline, hence the term declining business. This industry is characterized by many large companies with almost no product differentiation and numerous high elevation barriers to entry. These factors indicate the presence of stiff competition that leads to a gradual decline, and there are no opportunities, but many threats exist.
3) Walmart Stores, Inc.
Which should be the primary basis for formulating a strategy?
Strategy formulation involves choosing the best ways aimed at achieving the set goals. Being an essential aspect of the growth and sustainability of a company, it is necessary to adapt a perfect strategy. The primary basis for the formulation of a strategy should be a firm’s capabilities and strengths. Capabilities and strengths of a firm define its financial constraints and other important factors that enable the flourishing of business. In the formulation of a strategy, consideration of capabilities and strengths is critical because while formulating these strategies, the management will in a position to know what they can achieve by being able to evaluate their likelihood of venturing into a particular activity and making a success out of it. Considering the aspect of the external market in strategy formulation may lead to failures because there exist different requirements that require different capabilities and strengths; hence a strategy must be based on the capabilities and strengths of a company.
Walmart’s activities in the US best suits its capabilities and strengths. This argument is solely based on the fact that the American market is vast and with different customer needs, which leaves Walmart at a front foot compared to other companies; hence with numerous strengths and capabilities, Walmart can fully satisfy these needs. The international market is not solely based on capabilities and strengths due to different foreign policies that may hinder growth, even with numerous capabilities and strengths.
4) Discuss competitive advantages, both differentiation, and cost advantage.
5) A Company that has managed an innovation
Google, like any other innovative company, comes up with different innovations to better its place in the technology and communications sector. In this section, Google’s development of Gmail is briefly discussed. With Email being the only way of sending emails and communication from different continents, Google came up with a product that proved ten times better than Email. Gmail was an idea generated by one of Google’s employees but eventually actualized by a team of engineers through a group of stages. The innovation in this new mode of communication was more focused on the storage and bulk of messages sent. The development of Gmail led to more advanced communications with customers being able to post pictures and other files while also being able to read messages sent earlier. This innovation was motivated by the need for more advanced communication modes and the inability of Email to store messages.
Digitization lowers barriers, thus gives an upper hand to fast-moving competitors. Companies in the era of digitalization are coming up with strategies that can see them emerge as leading businesses in the age. These strategies include; adapting new trends that favor digitization whereby companies enable their systems to move with the changing trends. Secondly, companies also digitization adaptability determines whether company losses or gains value hence the need for advanced incumbents whereby the company ensures both the company and its customers see the need for moving with the digital era. Finally, strategies that evaluate the capabilities are crucial in attaining flexibility in this digital era.
6) Discuss internationalization through an example, Chipotle Mexican Grill: Can Chipotle replicate its massive success within the US in overseas markets?
- a) Chipotle restaurant strategy emphasizes that the food being served must be raised in the right way. By adopting this strategy of “Food with Integrity,” Chipotle can meet customer demands in most parts of the world hence making the business well suited for overseas markets. Things like; seasonal, artisanal, and locally sourced ingredients define the concept of Chipotles desire to grow fast-food’ industry all over the world.
Overseas consumers have the same fundamental preferences as those in North America. For instance, they all prefer locally sourced ingredients.
- b) While Chipotle remains overwhelmingly successful in the US, recreation into the overseas market may prove impossible due to the existence of other well-established food joints. Different policies existing in foreign markets may serve as a hindrance to attaining success witnessed in the US.
- c) Opportunities in the overseas market should be met with the same strategies as in the US. However, the business’ strategy must adapt to foreign markets by meeting the expected criteria. Greenfield venturing should be the mode of entry to be adapted by this business. This mode will prove crucial because it will ensure that the Company’s standards do not go down due to a partnership.
7) Honeywell is involved in four different industries, namely; Control systems and automation, power systems and transportation, aerospace, and specialty materials. These industries are either related or unrelated in that some of the businesses depend on others while others operate independently. Honeywell’s success is attributed to its diversification strategy that brings along different advantages related to the sharing of ideas and the marketing of products by the name of the brand.
Honeywell is mainly related in that they share common traits like dealings in electronic products and general engineering. Again, the four segments work hand in hand. However, the four parts are unrelated in the manner by which they serve their customers and the type of customers they have.
Honeywell’s diversification strategy has led to increased profits over time. Diversification has enabled Honeywell to deal with numerous businesses that give it more and more benefits. Diversification of products has also enabled Honeywell to be able to deliver unrelated goods together, thus increased profits.
8) a) The global business environment is on a rapid change, and in five years, numerous developments will have been made that will kick some giant industries out of the market. These developments include advanced technological systems of employment and work undertaking. In technological advancements, both market and work will be technologically leading to the gradual extinction of manual labor. Globalization also will see employees listing themselves as players in global business.
- b) The most significant challenges to be faced by firms in the future are those related to technology. Firms with better technology are on the rise, and this will be the main problem for companies in industrialized countries. Firms wishing to remain relevant in this business must be adaptive to new technological advancements.
- c) To thrive in environments with vast technological advancements, firms will have to embrace strategies that will make them remain relevant. Some of these strategies include those that have sustained old companies. Consistency, creation of a trust, and standing for something are some of the best strategies that these firms must embrace to be relevant.
- d) These developments will imply that firms must find other management systems with different leadership styles that fit into the developments.